Monday, February 11, 2008

Quantitative Trends: 2008

It's that time of year again! As 2008 is well underway, Linda has put together her much anticipated "state of the union address" sharing her thoughts on the outlook for this year's quantitative job market. You'll find that below.As always, we welcome your input and observations, so feel free to post your opinions!

TRENDS 2008

Don’t Panic Over Recession Forecasts

In light of the dire predictions filling today’s economic and political news, I want to share some of my expectations for the quantitative job market going in 2008.Many of the sobering employment statistics released February 1 by the US Labor Department do not reflect our industry’s current outlook.Though the economy as a whole lost 17,000 jobs in January (the first monthly decline in four years), and the number of long-term unemployed (+6 months) is up about 21% from a year ago, I am happy to report that job security for the quantitative professional is high, with continued strong demand and frustratingly short supply.

Quantitative Professionals are Secure …

Recruiters here have not seen any significant signs of slowdown in our job markets.To date, there have been few layoffs in the quantitative professions, and recruiting and hiring remain a priority for many departments.Talented professionals are still in short supply, continuing to make it difficult to fill open positions even in this changing economic climate, and also making quantitative specialists less vulnerable during layoffs.

… with Some Exceptions

The consumer credit groups are a bit of an exception to the general level of security afforded the rest of the quantitative industry.The mortgage crisis has resulted in some cutbacks at lending institutions, banks and real estate companies, especially those heavily involved in the subprime market.For those who remain, bonuses have been uneven.

In addition, corporate hiring managers do seem less interested in entry-level statisticians at this time, believing (or maybe just hoping) they will be able to take advantage of the softening market to add experienced, talented staffers.I continue to encourage our clients to be open to considering junior or entry-level statisticians, as other industries are still competing for more experienced hires.By accommodating the learning curve of entry-level statisticians, companies may be cultivating a unique talent base that will garner large returns on their investments as the need for industry-specific quantitative experience continues to grow unchecked.

Industry Crossover Presents New Opportunities

Hiring managers across the board are realizing they might find the employees they need among the ailing credit industry’s talented quantitative professionals.Candidates with bank and credit experience offer knowledge of sophisticated statistical techniques, as well as expertise in managing large and often messy data sets.In the past, it has been a challenge for other industries to compete with the higher compensation levels and generous benefit packages of the big banks.As the credit industry pulls back, candidates are looking outside that arena with new eyes, suddenly able to appreciate the career advantages offered by knowledge diversification.

Consulting Firms Continue Healthy Growth

As many corporations are realizing the limitations of outsourcing their analytics overseas, they have turned to domestic consulting resources to handle their quantitative needs.This has lead to

a visibly growing demand for quantitative professionals in consulting environments - from very large global concerns to small boutique shops.

Relocation Presents Continuing Challenges

For 18 months, the soft housing market has had a major impact on the ability of candidates who own homes to relocate.A few companies are able to provide a safety net for homeowners through a buy-back policy, reducing the stress involved for families contemplating a move.Other companies have agreed to extend temporary housing allowances (in the past often limited to three months) to accommodate the longer time required to sell a home.

Salaries Remain Firm

In another sign that our industry is riding out the recession news, the recent market pullback has not reduced the salary offers our quantitative candidates are receiving.Though bonuses will be disappointing for many this February and March, others will see on- or above-target payouts.The frequency of sign-on bonuses is also holding steady at about 35% of the offers our candidates receive.

Let Us Help You Navigate the Shifting Economic Terrain

Though negative economic reports continue to make the daily news, the real news for our industry is much brighter.Quantitative professionals are still enjoying lucrative careers, with new opportunities for growth and diversification rising from both traditional and unexpected sources.Smart hiring, creative thinking and careful career management will help ensure a positive outlook for quantitative professionals.I will continue to monitor the market closely for changes and trends, and look forward to analyzing the news to help you stay abreast of developments affecting your career.

Let me know if you have any questions or comments, as well as how we can help you plan for this year and the years to come.